Breaking the Brokers’ Sexual Harassment Culture

An Interview with Pam Martens

Pam Martens has worked on Wall Street for the past 16 years. She is the recipient of the Woman of Courage Award from the National Organization for Women and the Susan B. Anthony Award from its New York City Chapter. Her suit, Martens v. Smith Barney, challenging mandatory arbitration for employee grievances, including civil rights-related claims, is in its seventh year in U.S. federal courts.

Multinational Monitor: What was your experience working as an investment broker?

Pamela Martens: In 1984, I started working as a stockbroker trainee at the Garden City, New York branch of Shearson, which became Smith Barney in December of that year [and more recently has been acquired by Citigroup]. Over the next decade, I experienced a variety of sexual harassment. The branch manager pull a gun on me shortly after I started. He constantly used foul and degrading language, especially toward women. In the sales meetings, for instance, he called the clerical workers “a pack of humps” and told the brokers that if they had to call their wives so many times, maybe they should “go home and lay between their legs.” He also used anti-Semitic language such as, “you guys who nailed Jesus to the cross.” He also used other language too vile to repeat.

Women were always verbally abused in myriad ways. I learned to grow my business by simply coming in in the morning, going to my private office and shutting the door and leaving promptly at 5 o’clock in the evening.

This was at a Fortune 100 company. The branch manager was trying to create an atmosphere of bravado for the male brokers. He also turned a storage room in the basement into what he called the “boom boom room,” a name that was put on the company phone number list.

The first time I went down to the “boom boom room,” there was a white toilet bowl hanging from the ceiling, and a bicycle hanging from the ceiling. The branch manager had taken a large garbage can, put a black plastic liner in it, and filled it with bloody mary mix. He was doling out drinks to the workers with a soup ladle. As I walked in one time, he twisted my arm and kissed me on the lips. I exited the room and never came back.

MM: What caused you to file the lawsuit after putting up with 10 years of this type of behavior?

Martens: On August 31, 1994 the branch manager called the 24 low-wage sales assistants, all of whom were women, into a meeting. He told them that if they did not volunteer their personal time for his favorite charity, they would be denied raises, bonuses and time off. If they went outside for a cigarette, they would be docked. If they went to a funeral, they wouldn’t get time off, but would be docked.

Then he called a meeting of the brokers, 95 percent of whom were men, because he was going to demand that they give him a check for his favorite charity. As a matter of fact, he had told the sales assistants, “You women have no money, so you’re going to donate your personal time. The brokers are going to give me a check.” Because I had heard of this conduct right after the sales assistants’ meeting, I blasted him at the beginning of the brokers’ meeting before he could speak. I told him I was ashamed that I had not spoken up in the prior 10 years, but now there were 24 witnesses to his egregious conduct. He responded by yelling “We’ll throw you out of the office and throw a party afterwards.”

On October 3, I wrote a letter to Jamie Dimon, who was then the president of Smith Barney, laying out the full 10 years of this branch manager’s conduct.

MM: What kind of response did you get from upper management?

Martens: Over the next few months, they gave the branch manager free reign to try to drive me out of the office. The branch manager told another broker that he was going to snap my neck, and told another broker in vile language I don’t want to repeat that he was going to rape me.

The general counsel of the firm called me and said that I should resign. When I didn’t and tried to stand my ground and be a positive role model for the other women, they decided that the branch manager would retire with full benefits. They threw a lavish retirement party for him at a private country club and two days later they fired me on the pretext that I had missed a meeting.

Along with two other women, I went and consulted with an attorney in New York, where we found out it wouldn’t be so easy to bring a lawsuit against the firm. They had set up a mandatory arbitration system for all employee disputes. The language that supposedly bound us to this was buried somewhere in our employee handbook.

But we also learned that class actions were not bound to end up in mandatory arbitration. So three of us — Judith Mione and Roberta O’Brien Thomann and myself — filed a class action suit on May 20, 1996.

After learning about our case, a writer at the New York Daily News seized upon one of the charges, especially the story of the boom boom room, and put a photo of two of us on the front cover. The day after that, they put a picture of the branch manager on the cover. A lot of the details of the case were obscured by the story of the boom boom room and other more titillating stories.

Nevertheless, a lot of other women around the country learned from the publicity generated by our case and called to join the suit. By October of 1996, an additional 23 women from 11 states had joined. By the time it was finally settled, 2,000 women had come forward with charges against the firm. Many of the charges were more extreme than our initial charges. There was a charge from the Walnut Creek, California office where an attempted rape had allegedly been made on the premises by a broker against an operations manager. There were other physical and sexual assaults of young female workers.

MM: Why did you opt out of the settlement?

Martens: Judith Mione and I opted out of the settlement because one of the purposes of the action was to stop the private justice system, which we felt encouraged sexual harassment and related activities, because if you know these things are never going to see the light of day in federal court, but will inevitably end up in a rigged, private arbitration system, then of course there is no real deterrent against that kind of conduct.

The final stage of the class action settlement agreement sent all the women into this system of private arbitration.

There were many other things wrong with the settlement. We discovered that the administrator of this private arbitration system was going to be Duke University, a 20-year investment client of Smith Barney. Also, the two Chicago lawyers who filed the class action –– Mary Stowell and Linda Friedman –– received $12.9 million under the settlement, while the class itself initially received zero. The class had to go into these rigged arbitrations to try to get any money from this settlement.

Why would Smith Barney, with all its resources and a 300-person New York law firm to defend it, agree to pay two lawyers $12.9 million? The reason is that the settlement bought total and complete immunity for Smith Barney. Also, even though it’s illegal to settle claims that were never asserted, they settled other potential claims by the women, including racial discrimination.

Amy Segal, a plaintiff against another Wall Street firm, set up a web site –– www.womenonwall.com –– which has a discussion board where the women who agreed to the settlement are now revealing how these mediations and arbitrations are a kangaroo court. There are also women from Merrill Lynch complaining on that site, because these same two attorneys — Mary Stowell and Linda Friedman — also quickly bought Merrill Lynch immunity with an almost identical settlement. In the process they collected $5 million.

Stowell and Friedman fired us as clients, because we were objecting to the settlement, so we had to quickly file a motion for reconsideration. We filed a pro se fraud motion with the court, detailing why the settlement was illegal.

We also filed a pro se ethics complaint against the judge with the judicial council, detailing how during the course of our suit, she refused to recuse herself, even though her son was doing multimillion dollar municipal bond deals with Salomon Smith Barney. After we opted out, we hired an attorney — Gary Phelan — that we have since been with for four years. So together we have continued to fight to have our claims heard in federal court against mandatory arbitration.

MM: How else have you attempted to address the mandatory arbitration issue?

Martens: In recent weeks we have been working with Senator Kennedy’s, D-Massachusetts, office. Kennedy and Senator Feingold, D-Wisconsin, are preparing to introduce the equivalent of a House bill known as the Preservation of Civil Rights Protection Act. That bill would outlaw mandatory arbitration as a condition of employment, freeing workers to go into federal court.

MM: Have conditions in the industry changed since you filed the lawsuit?

Martens: If anything, the industry has gotten worse. Women all around the country are contacting us through the web site and through the New York chapter of NOW, and telling us what is going on in their offices. We’ve heard of additional cases where women have been raped and quickly given a pay-off to stay quiet. Virtually all of the most egregious employees responsible for the worst behavior are still employed at Smith Barney.

The percentage of women in the higher-paid broker positions is also still low — about 14 percent. That’s lower than other white-collar professions. For instance, if you look at the most recent census report, you find that 52 percent of insurance and real estate sales employees are women. That’s in line with the reality that women represent 52 percent of the overall labor force. Being a stock broker doesn’t involve any special kind of heavy lifting – you don’t have to have upper body strength to write a stock ticket. Plus women bring a lot to the table in terms of the nurturing instinct to protect people’s life savings. That is one reason I feel that Wall Street doesn’t want us there — Wall Street has always operated on a “what’s good for us” basis. You’re not really supposed to be there safeguarding people’s assets, you’re supposed to be trading and churning and generating profits for the company.